S.Africa still the gateway into Africa - CNBC Africa

S.Africa still the gateway into Africa

Southern Africa

by admin 0

South Africa's maturing infrastructure puts it at an advantage over other African countries. PHOTO: Getty Images

“Africa is a very diverse continent. You’ve got 54 different countries that make up the continent and you’ve got quite a wide variety of economies [with] different levels of infrastructure, different types of consumers, legal and financial systems. What you have in South Africa is a phenomenal legacy as a stable economy and a stable gateway into Africa,” Thiru Pillay, head of consulting at Deloitte Consulting, told CNBC Africa.

“I think as time evolves, different markets evolve in different ways. You still have a very stable legal framework for businesses to establish and operate in South Africa, a mature financial system, a reasonably good infrastructure [and] a good logistics platform in the country.”

Current economic indicators nevertheless show that South Africa’s economy is struggling. The South Africa Reserve Bank kept interest rates on hold in its last two policy meetings in a bid to stabilise the rand and rising inflation. This was after raising the lending rate by 50 basis points in January.

(READ MORE: S.Africa's economy facing "enormous headwinds"- Marcus)

Despite the challenges, South Africa’s port and rail infrastructure is relatively stable, especially when compared to other regions within the continent. This puts South Africa at an advantage as the springboard into the rest of the continent.


Pillay added that infrastructure platforms in other African countries have however begun to mature, making it easier to do business. With six of the 10 fastest growing economies in the world being in sub-Saharan Africa, the fundamental infrastructure and logistics is slowly improving.

(READ MORE: Africa constantly recieving diverse investment interest)

“When you look at the African market, what makes it so exciting? The first is the consumers and the addressable spend that you have with over 350 million consumers. That makes it very appealing to consumer business. If you’re looking for resources, Africa is the place to be,” Pillay explained.

“The third is there is probably no other place on planet earth that is considering the level of infrastructure spend or infrastructure deployment like the African continent. Resources, infrastructure deployment and addressable market from a consumer perspective make the African market very appealing to investors."